Ever since last Wednesday’s ugly sell-off, the markets have been back on that bullish escalator that I wrote about earlier this week. The only sectors that can’t make their way onto the escalator are energy and financials. So, while the strategy has been to put your money into the strong acting sectors like Technology and Healthcare, it is equally as important to avoid sectors such as energy and financials. By the way, the S&P 500 (SPX) closed over the 2,400 level at an all-time high yesterday.
Too many people focus on picking the right stocks and sectors; whereas, the optimal way to approach stock picking is knowing what to avoid. Thus, if you avoid the losers, you will by default own the winners.
As I mentioned, technology continues to lead the markets higher This is not a 1990s-style technology boom, which as we know was most irrational and built on the backs of hope and hype. Rather, this tech boom is built off the back of mega and large-cap stocks with strong earnings and cash flow.
Two of those current tech leaders – Amazon (AMZN) and Alphabet (GOOGL) – are zeroing in on the $1,000 share price level. I would note that Apple (AAPL), on a pre-stock split basis and Priceline Group (PCLN) have already achieved that level.
Which one hits that magic price level first, I cannot say. Gun to my head, it is AMZN. However, they should both achieve that goal, if not today then next week. Of course, once that occurs, it will be a psychological boost to those stocks and the other mega-cap tech stocks.
The emerging markets are heating up. I decided to allocate a small amount of capital, very small, to the emerging markets. I would be inclined to add to those positions in the future, should conditions persist.
We have the three-day Memorial Day weekend upon us. As such, I expect the early slide syndrome to kick in this afternoon and then a light action day on Tuesday.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AAPL, AMZN, GOOGL, PCLN, SSO & SPXL— although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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